I thought I’d never see the day when the NAR economist wrote something like this –
Based on the latest available information, my outlook is for new single-family home construction to decline for another year-and-a-half through the second quarter of 2009.
However, lower home construction activity is just what is needed to help stabilize the housing market.Â Abundant inventory is not what we want.Â A high number of vacant new homes will pressure home prices on existing homes to fall and that could result in a sizable loss in housing equity for a vast portion of 75 million homeowners in the U.S.Â Consumer spending can spiral downward fast from loss in equity and push the economy into a deep recession.Â So the only way to halt this scenario is for the inventory to be reduced.Â
It’s not a pretty forecast, it’s not overtly sunshine-y, but it appears to be an honest assessment, and that’s just what we all need.
If Mr. Yun keeps this up, one day people might get used to candid analysis from NAR – and then what would we write about?
The RSS feed for the economic commentaries is here.
One question – how many consumers are even aware of the NAR’s history of ahem – BS – analyses?